The responsibility of service is to ensure the availability of equipment. For production materials, service timeliness is very important. Therefore, every OEM attaches great importance to it. With the development of large-scale production and manufacturing, the division of labor in society has become more and more detailed. Each OEM has many suppliers of parts and components. These parts are not only used in the manufacture of complete machines, but also For after-sales service, the parts are transported by the supplier to the OEM parts central warehouse, and then distributed from the parts central warehouse to the regional center warehouse, agents, agent branches or service stations closer to the customer, and finally sold to users or users. For maintenance services, in order to meet the needs of users in a timely manner.
On the surface, the above-mentioned parts distribution system is perfect. It can not only meet the needs of customers in the aftermarket, but also bring aftermarket benefits to OEMs, agents and suppliers. However, during the implementation of the parts inventory plan, we found that there are still many problems with this top-down parts inventory plan.
Problems with top-down parts inventory planning
Today's maintenance services are becoming more and more professional. Essentially, they have changed from previous repairs to replacement of damaged parts, because doing so saves time and money, and also guarantees quality. Therefore, the timeliness of the supply of accessories determines the timeliness of the maintenance service. After all, it is difficult for a clever woman to cook without rice, and the maintenance service cannot be completed in time without accessories.
However, which parts should be stored in the agent's warehouse? Which parts should be stored in the OEM's warehouse? Which parts should be stored and which should not be stored? These questions have not been clearly answered. In the absence of demand forecasting, a top-down parts inventory planning system is used by the OEM to determine which parts to store and how much. However, the OEM does not have user demand data and market forecasts, so the accuracy of inventory planning is very low.
Due to the vast area of China, for many years, some OEMs have set up regional central warehouses to shorten the delivery time and improve customer satisfaction. Some regional parts warehouses are even located overseas; in order to meet the needs of major customers, some OEMs even set up parts consignment The warehouse hopes to increase the investment in accessories to eliminate the worries of customers. There is no problem with the starting point of these practices, but in many cases the results are disappointing. The regional center warehouse and the accessory consignment warehouse have almost become backlogs, causing huge losses to the enterprise.
In fact, it is not that there is a problem with the idea of setting up a regional center library, but that the inventory plan is not done well and the demand forecast is lacking. Of course, the result is not good. Therefore, the spare parts inventory strategy of OEMs has always been to encourage agents to store more spare parts. Not only do they press the spare parts into the dealer's warehouse, but also mobilize them to put the spare parts in the branch and service station closer to the user to ensure Timeliness of service.
This strategy is easy to understand. Agents directly provide services to users. If the agents are out of stock and the OEM's spare parts inventory is sufficient, it will be difficult to meet the service timeliness requirements, causing users to stop and wait, causing user dissatisfaction.
When the whole machine business is booming, the agents make a lot of money and are also willing to increase the spare parts inventory, because the timely performance of the service guarantees the good reputation of the customer for the brand, and the whole machine sales have a solid foundation. Therefore, the OEM asks them to store more parts. They are often very cooperative. They store whatever the OEM recommends them to store.
This situation has changed a lot in recent years. There have been many conflicts between agents and OEMs on the issue of spare parts inventory, and they often play games. The main reasons are as follows:
1. In the past, parts were purchased according to the recommended list of OEMs, but many parts became sluggish inventory, and the manufacturers refused to buy back, which made the agents very hurt;
2. The spare parts personnel of the OEM do not understand inventory management. The agents found that many OEMs’ inventory recommendations are only to complete their sales tasks, because the spare parts inventory of the OEMs is the sales performance of the OEMs, which seriously damages the agents. The trust of the supplier to the OEM;
3. After years of operation, agents’ backlog of sluggish inventory has become larger and larger, taking up a lot of their funds, but OEMs don’t care about how to deal with these sluggish inventory, they are more concerned about how to complete their parts sales tasks, which has a serious impact The enthusiasm of the agent's spare parts inventory;
4. With the arrival of the stock market, manufacturers’ spare parts have continued to increase their tasks, and the spare parts inventory will be pushed to the dealer’s place. This is of great benefit to the OEM. But if the spare parts cannot be sold, what should the dealer do?
5. In order to complete the task of the OEM, many agents purchase parts more than the parts out of the warehouse (sales) amount, resulting in a continuous increase in parts inventory, and inventory turnover rate decreases year by year. If this situation cannot be reversed, the agents will sooner or later fall into a financial and profit dilemma.
According to the statistics of Youke Information Technology, the ineffective inventory ratio of many agents has exceeded three-quarters. The longer the operation time, the higher the sluggish inventory ratio and the greater the capital occupied, resulting in lower and lower inventory turnover rates of the agents. The stock-out rate is getting higher and higher. Nobody wants the spare parts in the warehouse, and the parts needed by the user are not in the warehouse, so the agents can't do anything about it.
Make inventory planning with three-box inventory management model
The main reason for the above-mentioned problems is that the OEMs and agents lack understanding of the spare parts inventory plan. They don’t know which spare parts should be stored and how many should be stored? If these questions cannot be answered, the OEM and dealers can only make inventory based on their experience. Plan, the result will inevitably lead to a large amount of spare parts inventory backlog and waste.
For the question of how many parts should be stored in the parts warehouse, we can use the three-box inventory management model to predict and evaluate. Assuming that the ordering period for a company to purchase stock parts from a supplier is T, if there is a minimum order quantity, the order period T can be calculated using the minimum order quantity and the average demand quantity. Then the first box is called Working Stock, It is the demand for accessories in the T period, which guarantees the demand in the middle of the next order.
If a company has ordered parts from a supplier, it still needs a delivery date LT to receive the parts, so the second box is called Working Reserve, which is the required quantity to ensure the delivery time of the parts and the delivery of the parts The warehouse will not be out of stock before.
The above models are based on ideal conditions. Once the demand fluctuates or the delivery time is extended, there may be out of stock. At the same time, in order to ensure the desired target stock rate of parts, we set a third box called Safety Stock to compensate for forecast deviations and delivery delays, and increase the probability of meeting customer needs. This is the three-box inventory management model. When the three boxes are added together, it is the amount of inventory that the accessory needs to store.
According to the three-box inventory management model, the agent can calculate which parts should be stored and how much quantity should be stored. For example, if the order cycle of a certain accessory is 1 month, the delivery time is also 1 month, the spot rate of the accessory is 95%, and the safety stock that needs to be set after calculation is 2 months of inventory. Therefore, The maximum inventory of the accessory is the 4-month demand. According to the historical data of the accessory demand, the weighted average of the monthly demand for the accessory is calculated, and the 4-month demand is added to each replenishment. It can ensure that user needs are met, while avoiding sluggish inventory and excess inventory.
Distributed parts inventory coordination strategy
The three-box inventory management model solves the problem of which parts are stored and how many quantities are stored. However, which parts should be stored in the OEM warehouse? Which parts should be stored in the regional center warehouse? Which parts should be stored in the agent or service station? Which parts should be stored in the supplier? This is the parts inventory coordination strategy.
In the past, the regional center warehouses, parts consignment warehouses, and overseas parts warehouses set up by some OEMs were almost unsuccessful. Not only did they waste a lot of money, they created a large inventory backlog, and the timeliness of services was not improved. The reason for this result is that the company lacks professional inventory planning and management, and lacks the forecast of spare parts demand. Almost all of these spare parts inventory is determined by experience. In other words, it is determined by tapping the head, which is of course difficult to be accurate. The top-down parts inventory plan is out of user needs, and problems will inevitably arise.
Agents are not opposed to parts inventory, because inventory shortens the delivery time and improves service timeliness, which is very popular with agents. Once the accessories are out of stock, it may cause loss of customers. As long as the inventory can be turned around, the agent can make a profit. Some OEMs use user demand data to help agents make inventory plans, and buy back a certain percentage of sluggish inventory every year, so that agents have no worries about their inventory and are willing to stock more parts. Therefore, the OEM should not only set up reasonable parts procurement tasks for agents, but also help them to revitalize the sluggish inventory, better reflect the relationship between partners, and achieve a win-win situation.
Unfortunately, suppliers, OEMs, and agents are more game-playing in parts inventory, but lack of coordination. Upstream manufacturers hope to reduce parts inventory to downstream manufacturers in order to achieve more sales and profits. This kind of game is always paid by the weaker party-the agent, which causes a large amount of sluggish inventory and ultimately harms the interests of users. It is getting harder and harder to make money in the sales of complete machines, and free services have been implemented for many years. If parts lose money again, the development of the agency system will be difficult to sustain, and OEMs must make changes.
Let's think about the issue of spare parts inventory from another angle. Accessories can be divided into fast turnover, medium speed turnover, slow turnover and zero turnover parts. Fast and medium speed turnover parts should be stored in agents and service stations. The demand is the most and the closest to the user. The inventory quantity is calculated according to the three-box model. If the slow turnover parts are stored in the warehouse of an agent (responsible for a region), it is easy to become sluggish; if they are placed in the warehouse of the main engine factory (facing the national or global market), they may become medium-speed turnover parts, and the risk of sluggishness is reduced. a lot of. It is more appropriate for zero-turnover parts to be stored at the supplier.
Another change is to adopt a distributed parts inventory coordination strategy, from top-down to bottom-up inventory planning. First, calculate the inventory of the service station based on the user demand data of the service station, and then calculate the inventory of the service station according to the agent’s Summarize the data to calculate the inventory of the agents, and then calculate the inventory of the OEM. The target of the OEM's spare parts spot rate is higher than that of the agent, and the target of the spare parts spot rate of the agent is higher than the target of the service station. The inventory of the OEM minus the inventory calculated by each agent is the amount of inventory required by the central warehouse.
For example, an agent’s three-box inventory calculated for a certain slow turnover accessory is 0.3, and the agent does not need to keep inventory according to the principle of rounding. Summarizing the parts demand data of several provinces in the southwest region, it is calculated that the inventory in the southwest region should be 4.9 (rounded to 5). There are already 2 in the warehouses of several agents, and the regional center warehouse needs to put 3. The main engine factory summarizes the demand data of agents across the country and calculates that the total inventory is 25. After removing the 19 already stored in the agent and regional center warehouse, the inventory required by the main engine factory central warehouse is 6. In this way, the sluggish loss caused by the blind inventory of the regional parts warehouse and the central warehouse of the main engine factory is avoided. Parts with extremely slow or zero turnover should be signed into a strategic cooperation agreement, and in principle should be placed in the supplier’s warehouse.
In this way, through the distributed spare parts inventory coordination strategy, it not only ensures that there is a certain amount of inventory in the warehouse closest to the user, but also ensures that if there is a shortage, it can be transferred from the regional center warehouse closest to the market. At the same time, the OEM and the supplier The spare parts inventory can also be used as a strong backing for agents. In this way, the problem of "what is stored in the OEM, what is stored in the agent, what is stored in the regional center, and what is stored in the supplier" is well solved, which not only realizes the rapid response of parts, guarantees customer satisfaction, but also maximizes Avoid sluggish inventory of agents and OEMs.
